The S&P 500 $SPX closed higher today for the sixth session in a row, with options bulls showing little signs of slowing down. United Parcel Service UPS – NYSE was on the receiving end of perhaps the most unusual trade of the day, as 15,000 UPS April 135/150 bull call spreads crossed the tape.
At $0.73 per spread, this trade cost just under $1.1 million. To pay off, UPS needs to increase 14% to the break-even price of $135.73 by expiration. Maximum value is achieved at the short strike at $150 (+26%), wherein each spread will make $14.27 — or $21.4 million in total.
UPS has been steadily ramping higher for the past five months. While some consolidation is likely, this trade indicates the run is far from over.
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